Universal Credit imposing punitive debt repayment

When we met John at our stall outside Dundee buroo yesterday he was brimming with frustration. He had recently started a six week job, and had not un-naturally expected his finances to get a bit easier. But John is on Universal Credit. This is reduced by 65p for every pound he earns – which is better than if he were on JSA, though still an absurd effective tax rate – however that was only the beginning of his problems. Over the years John had built up quite a number of debts, as people surviving on precarious employment often do: things like rent and council tax arrears. The expectation has been that people repay these debts in small manageable increments. But Universal Credit seems to be changing all that. The rules are – of course – complicated, and vary with the type of debt, but people with multiple debts can find their Universal Credit completely gone in repayments. This had happened to John, so that all he was left with was his wages of less than £300 a month. To make this worse, he had not been made aware that this was going to happen – despite all the rhetoric about training people to plan their finances. (In fact the unpredictability of Universal Credit payments has been the source of numerous complaints.) He had already had to be given a bit of Emergency Grant money from the Scottish Welfare Fund last week, but was going to have to ask for more having been turned down by the buroo for a benefit advance. (A similar experience was reported in the East Lothian Courier last week.)

We have had a chat about this with the helpful people at the Child Poverty Action Group, who have found that the DWP’s default position seems to be to deduct the maximum possible – in fact you could say that the change to Universal Credit is being used as an excuse to recalibrate and reset debt repayments at the highest level – but that there should still be scope to agree more realistic amounts. With Universal Credit, finding someone to talk with is never easy, but the first port of call would be your ‘jobcoach’ who could put your request to a ‘decision maker’. If that gets nowhere, there’s Welfare Rights, and of course the MP – which serves the double function of keeping the MP informed of the horrible realities of the system.

Yesterday we also met Hailey, who was on the verge of tears. She had been told that despite her doctor’s line she should be looking for work, but, as she explained to us, she has suffered serious depression since her early teens and doesn’t feel able to do a job. Because she had been found ‘fit for work’ at a Work Capability Assessment two years ago, the jobcentre said that ESA was impossible. But her condition has worsened significantly since that time, so we were able to tell her that she should be able to apply for ESA again. (Unless you have a new condition or are significantly worse, once you have been refused ESA they will not reconsider another application, which makes it important not to give up on an appeal that first time.) We gave Hailey details of the council’s welfare rights drop-in yesterday afternoon to get the process started straight away.

And we were able to give some advice about applying for a Warm Home Discount.